A Comprehensive Guide to Commercial Real Estate Loans
If you're planning a new project as a subdivision developer or seeking to refinance an office building as an owner, you'll require a commercial real estate loan . Commercial real estate pertains to properties used for business purposes, such as malls or hotels, and differs from residential real estate. Business owners, including small business owners, developers, and investors, are the typical borrowers for commercial real estate loans. Unlike residential mortgages, these loans follow a distinct process of underwriting, structure, interest rates, and fees, with multiple options available. Understanding Commercial Real Estate Loans Commercial real estate loans, like residential mortgages, are secured by liens and often utilized to fund property acquisition, development, and construction. However, commercial loans diverge because they may not be amortized over 20 years and are generally categorized as intermediate-term (lasting 3 years or less) or long-term (lasting 5-20 years